Assume that the economy has three types of people. 20% are fad
followers, 70% are passive investors, and 10% are informed traders.
The portfolio consisting of all informed traders has a beta of 1.2
and an alpha of 4.55%. The market has an expected return of 9% and
the risk-free rate is 3%. What is the alpha for the fad followers?
Enter your answer as a percentage to two decimal places (i.e. 0.12%
rather than 0.0012; the percent sign is...
Assume that the economy has three types of people. 15% are fad
followers, 75% are passive investors, and 10% are informed traders.
The portfolio consisting of all informed traders has a beta of 1.3
and an alpha of 2.62%. The market has an expected return of 12% and
the risk-free rate is 4 %.
What is the alpha for the fad followers? Enter your answer as a
percentage to two decimal places (i.e. 0.12% rather than 0.0012;
the percent sign...